Pay as you go: Physicians develop new payment models as changes occur

BY ELIZABETH BASSETT Fort Worth Business Press

The traditional model for health care used to be that patients would pay physicians directly for services given. With the advent of the health insurance industry, though, the traditional model is now for other entities—insurance companies or the government—to pay physicians for services on behalf of patients.

A small number of primary care doctors are turning away from the norm, though, in an effort to cut down on large patient loads and up the financial benefits of providing routine health care. Private physicians, concierge physicians, fee-for-service doctors: Whatever the name, some are adamant that they are a solution to the nation’s primary care and preventative health care crisis.

It’s a common complaint that primary care physicians—be they general practice, internists or family medicine specialists—don’t get reimbursed adequately for the medical care they provide. The lack of adequate reimbursements, plus the daunting student debt young physicians take on, means fewer are choosing to go into primary care, instead going to higher-paid specialties.

With health care reform promising to open access and with the baby boomer generation getting older, the nation is in dire need of more primary care physicians. However, many primary care doctors are switching specialties or retiring because it’s not financially lucrative to provide quality care—there’s no extra reimbursement for good quality care, said Fort Worth physician Dr. James Bohnsack.

Bohnsack practiced in the traditional model for many years, handling close to 5,000 patients (several thousand is not unusual). About a year and a half ago, though, he said he got fed up with making so little money and not being able to offer the quality care he felt his patients needed.

At one point he had practiced with Dr. Chris Ewin, and he contacted Ewin to help him switch his solo practice into a fee-for-care business model, which Ewin himself has. Ewin’s practice, 121MD, is a retainer model, and patients pay him a monthly fee (based on age) to have unlimited access to him. Ewin, who also has a consulting firm he uses to usher physicians through the business transition, worked with Bohnsack (now Ewin’s partner) to make the switch.

“I was intimidated about taking 5,000 patients and making it 500 patients,” Bohnsack said. “ . . .The main thing for me was the quality, how much I could do with the patient.”

Private physicians—there are estimated to be about 2,000 nationwide, represented by the American Academy of Private Physicians—argue that they give better health care to patients because they aren’t limited by insurance companies and that a patient’s money is better spent directly on a doctor rather than on a middleman.

Others would argue that limiting a primary care physician to only 500 or 600 patients isn’t a way to deal with the glut of patients who need physicians.

Ewin, past president of the organization that is now the AAPP, said primary care physicians who switch to a private model can make as much or more than more highly-reimbursed specialist physicians, like neurosurgeons. He envisions a world where primary care physicians have a two-phase career: When they’re fresh off their residencies, they join traditional practices with more experienced physicians, all working together to care for thousands of patients. The experienced physicians, after maybe a decade or so of practicing and earning the trust of patients, then transition out of the practice, taking a small number of patients with them and moving into a financially lucrative phase of their career.

It would be impossible for a new physician to build a successful private model practice without patients who trust him or her, Ewin said, but older physicians who are thinking of leaving medicine or suffering from burnout should be willing to make a change and at least still treat some patients.

“Doctors are afraid to change because they’re making an income, they have kids in college,” Ewin said.

Devon Herrick, a health economist and senior fellow with the National Center for Policy Analysis in Dallas, has written a brief on concierge physicians and said there’s actually a wide variety of various medical practice designs that are focused on cutting out insurance companies or making health care easier for patients.

“I’m seeing a variety of different practice styles,” he said. “ . . . At the really high end, you’re talking about services that you pay $10,000 and they don’t even practice medicine, they just manage your health care. . . . We’re also seeing some innovative ideas at the lower end of the spectrum.”

In the brief, he pointed to a physician who targeted small employers, who were less likely to offer health insurance to employees. Employers would pay $40 a month for each employee, who would then receive primary care. Even though the employees pay out of pocket for diagnostic tests or specialist care, they get discounts negotiated by the physician.

While health care reform will make the need for primary care physicians more acute, Ewin said, there wouldn’t need to be any policy shifts to encourage more private physicians. Instead, grassroots education and a mind shift among physicians is what’s needed. He admits that a private physician does have to be a salesperson, working to convince patients to join his or her practice.

In terms of policy or law, though, what is needed is for the definitions of health care to be opened up more. For example, pre-paid physician services, like Ewin’s, are are currently not included in the acceptable expenditures for health savings accounts.

Bohnsack said he is glad he transitioned out of his traditional practice, saying his new practice gives him more time to work on preventative care and managing a patient’s health, instead of waiting on a patient to become ill to come in to see him (and for him to be paid). The various practice designs physicians are experimenting with are an indicator that quality care is something doctors still want to provide.

“When you’re in the other mode of practice, you’d like to do it, it’s the right thing to do, but you just don’t have the time and there’s no incentive,” he said.

Two Tiered Medical Care for Haves and Have Nots – As doctors leave the system, patients scramble to find care

By ADAM GRAHAM-SILVERMAN, The Fiscal Times

Not long after Cynthia Thek gave birth, her gynecologist opened a new practice in Englewood, N.J. Gone was the traditional waiting room, replaced by a reception area with spa-like ambience. Instead of a hospital gown, patients got a plush bathrobe. “It’s a beautiful space. The staff is superfriendly. You don’t feel rushed by the doctor or even the staff,” Thek, 32, explained recently. “However, [the doctor] also stopped accepting any insurance.”

Thek stuck with her doctor, Jennifer Ashton, for one post-delivery visit, paying $250, about half of which her insurance reimbursed. But when she learned that care for her next pregnancy would run $8,000 to $10,000, much of it not reimbursable, she decided to look for a new OB-GYN.

A small but growing number of physicians are pursuing Dr. Ashton’s approach: abandoning traditional insurance-based practice to offer VIP treatment, including more time with patients, in return for upfront fees. In one common setup, often called concierge or retainer-based medicine, a primary care doctor charges an annual fee ranging from $1,000 to $20,000 just to get in the door. When doctors shift to this model they can cull their patient loads, selecting only those who can foot the bill. The services they provide often include a deluxe annual physical, 24-hour direct cell phone access to a doctor and escorts on visits to specialists. Some doctors still accept insurance and Medicare and bill normally for routine care. Others, like Dr. Ashton, opt out of that system in order to charge what the market will bear. Ashton did not respond to requests for comment .

The Haves, the Have-Nots

Doctors say the concierge system makes life much easier for them and assures better care to their remaining patients. “At the end of the day, you can look yourself in the mirror and you know that you did a good job with the patients you saw,” said Dr. Steve Reznick, a Boca Raton, Fla., physician who cut his roster of patients from 3,500 to fewer than 400 five years ago. “You couldn’t do that seeing 40 or 45 senior citizens a day in the past.” While that may be true for the doctor and remaining patients, it’s not always easy for the thousands who didn’t or couldn’t pay, and who had to find a new doctor. Some health care experts view this as an ominous trend that could exacerbate socioeconomic disparity in the health care system in light of a looming doctor shortage. They say this development could be especially troublesome once the new health care law adds millions of Americans to the health insurance rolls and sends them looking for doctors. “Doctors love it. But in fact, from a societal point of view it’s a tragedy,” said Dr. Richard Cooper, a senior fellow at the Leonard Davis Institute of Health Economics at the University of Pennsylvania.

The health care legislation recently signed by President Obama is aimed at lowering costs and adding insurance coverage for more than 30 million people by 2014, including 16 million new Medicaid members. But it does not account for the projected shortfall of 35,000 to 44,000 new primary care doctors, nurses practitioners and physician assistants that are choosing alternate disciplines because of increasing workloads, low reimbursements, a paperwork burden and a huge gap in pay compared with medical specialists.

The Doctor is Out

A 2009 survey of general practitioners by the American Academy of Family Physicians showed that 42 percent were not accepting new Medicaid patients. 65 million Americans are already living in areas the government has deemed short of primary care practitioners. And they’re not the only ones dropping out of the system. Recently, Walgreens and two other pharmacies in Seattle, Wash., decided to deny coverage to new Medicaid patients because of low reimbursements. And in a shocking move by one of the most revered hospitals in the country, The Mayo Clinic shuttered its Medicaid facility in Phoenix, Ariz., because it was losing too much money.

Dr. Marc Siegel fired a warning shot about the doctor dearth in an op-ed in the Wall Street Journal last April. “With more and more doctors dropping out of one insurance plan or another, especially government plans, there is no guarantee that you will be able to see a physician no matter what coverage you have,” he said. He cited a 2008 report by the Medicare Payment Advisory Commission stating that 28 percent of Medicare beneficiaries had trouble finding a primary care physician; another survey that year by the Texas Medical Association found that only 38 percent of primary care doctors in Texas took new Medicare patients. Texas is not alone, as more and more physicians try to find acceptable ways to practice medicine without feeling like they’re being exploited.

Top-of-the-Line Care for Top-of-the-Market Fees

Concierge-style medicine is one way that overloaded doctors have chosen to respond. The American Academy of Private Physicians, the trade group representing the concierge care movement, says more than 1,000 doctors have gone this route. By another measure, 1.2 percent of respondents to AAFP’s survey say they practice concierge, boutique or retainer medicine.

While fee-for-service, or “private,” doctors have long existed, primary care doctors began converting to the concierge model about 15 years ago. Companies came along to help doctors set up these practices and handle the administration. The largest, MDVIP, has more than 380 doctors. Reznick says all the physicians in Boca Raton have adopted this model, meaning that most patients face a payment just to get in a doctor’s door. (This rise of high-cost medical services was accompanied by low-cost fee-for-service programs aimed at the poor or uninsured.)

In 2002, MDVIP attracted the attention of several Democratic members of Congress, who questioned whether concierge physicians were essentially charging seniors for services that Medicare already provided at established rates. That would be illegal. In a letter and subsequent documents, Health and Human Services secretary Tommy Thompson said that this model was fine so long as the fee was for services that were not covered by Medicare. With the exception of one case in 2004, in which a concierge-style doctor in Minnesota paid more than $50,000 to settle a claim that he violated his agreement with Medicare, HHS has left these doctors alone.

But many doctors say that while the current system is not sustainable, drastic cuts in patient load are ultimately misguided. “It’s a short-term solution to say, ‘I’m going to cherry pick some people who can pay me a concierge fee,’” said Dr. Michael Stillman, an internist at Boston Medical Center. “The majority of us think it’s an unethical and ultimately selfish way to practice medicine.”

Dr. John Goldberg, an internist in the Kansas City area, said he could hardly ask a patient who can barely pay for medication to pay a fee for his care. Juggling many sick patients is just part of a day’s work, he said. “I worked in three or four people [Monday] that didn’t have an appointment Friday when we closed the office,” Goldberg said. “They’re not paying a premium; that’s just the right thing to do.”

The American Medical Association says there’s nothing inherently wrong with concierge-type of arrangements. However, its ethics manual cautions that they “not be promoted as a promise for more or better diagnostic and therapeutic services.” That puts concierge doctors, particularly those who offer traditional service as well, in the awkward position of trying to promise patients that they’re getting something for the extra money while telling the rest they’re not giving up any medical services.

Of course some concierge doctors do say they provide services, not necessarily better care. “What I sell my patients is a better day,” said Dr. Marcy Zwelling, head of AAPP and a concierge doctor near Long Beach, Calif., who shed most of her 3,000 patients. “Do I think that sitting in a waiting room is bad care? No, but it’s probably a waste of time. I don’t think people die because they don’t have what we do. But do I think my patients live longer? I know they do.” There are no peer-reviewed studies of the health benefits of this approach. MDVIP cites its own study showing lower hospitalization rates for Medicare patients who are in concierge practices compared with those who are not. One study from 2005 suggests that the pool of concierge subscribers is less black and Hispanic, and has fewer chronic illnesses, like diabetes, than the general patient population.

Changing by Default, Not Design?

Doctors who have adopted this approach say the current system has forced them into it. To break even with reimbursements from Medicare and private insurance, Dr. Susan Wilder said she used to be able to spend no more than 8 minutes with each patient. “You’re forced into a situation of seeing more and more patients in less and less time, and the patients are more and more complex, and the administrative costs go higher and higher,” said Wilder, who converted her suburban Phoenix practice to a hybrid in which some patients pay a concierge fee while others do not. Wilder said her longstanding patients know that they get quality care no matter what. “I don’t think they needed any reassurance. I’m not going to dumb myself down to take care of my routine patients,” she said.

Reznick, the Boca Raton doctor, said he tried everything to keep his practice afloat. But he couldn’t manage. He now charges an annual fee of $1,800 as well as small payments for office visits.

Like all the concierge doctors interviewed for this story, Reznick found other doctors to take the patients who did not join his program, and kept very ill patients as well as some who could not pay.

Groups that support concierge physicians say the cost – about $4 per day in most cases – is not prohibitive, and that it comes down to a question of choice in the marketplace. “People go to McDonald’s; people go to Burger King, you know,” said Zwelling. “It’s a choice.” Darin Engelhardt, the president of MDVIP, said that most physicians who convert are on the verge of leaving medicine altogether, so it’s not accurate to say that every conversion means one less doctor in the market. To the contrary, the success of MDVIP’s financial model will lure doctors back to general practice, he said.

“On the experienced physician side, we extend the careers of primary care physicians,” he said. “And as far as younger physicians go, we’ve created a model that can prove … that primary care can in fact be viable again.”

But for Thek, who quickly found a new OB-GYN who does accept her insurance, it was not worth the price. “I feel like I get the same level of care at the new practice,” she said, “minus the spa-like office and the plush bathrobe.”

Concierge medicine slow to catch on in Pittsburgh; could see boost from health care reform

Pittsburgh Business Times – by Kris B. Mamula

Health care reform will benefit concierge medicine by folding another 32 million Americans into a health system already overburdened and stressed by doctor shortages, experts say.

Primary care doctors who provide personalized care for a retainer is an idea that has been slow to catch on in the Pittsburgh area — only three doctors offer the service. But doctors say health care reform signed into law in March will drive an increasing number of people to what’s sometimes called private-pay medicine.

“This is ready to explode,” said Tom Blue, executive director of the American Academy of Private Physicians, a Glen Allen, Va.-based trade group. “Talk to any physician, and they will tell you the primary care business model has become unsustainable.

“We are besieged with phone calls and inquiries from physicians.”

Concierge practices multiply as more docs drop Medicare

By Debra Beaulieu.  Created May 19 2010 – 1:23pm.  article

As growing numbers of physicians tire of keeping up with the increasingly frantic treadmill of traditional practice [1] with the near-constant threat of doing it for less and less pay [2], it’s possible concierge medicine may become less boutique and more mainstream.

The American Academy of Private Physicians, the trade group representing the concierge care movement, says more than 1,000 doctors have gone this route, slashing their patient loads to offer VIP service to those who pay a fee, reports the Fiscal Times. According to an American Academy of Family Physicians survey, 1.2 percent of respondents say they practice concierge, boutique or retainer medicine.

The numbers may still be small, but many physicians who’ve made the switch report that the grass is greener, in terms of both their personal and financial fulfillment. While most of the nation’s primary-care physicians await month-to-month news of a looming pay cut, nearly 60 percent of all current concierge physicians are doing “better” financially than a year ago, while 29 percent indicated no change and 13 percent said they fared worse, according a February survey by the Concierge Medicine Research Collective, an Atlanta-based independent healthcare research center, a recent HealthLeaders Media article reports.

Some areas may be particularly ripe for a revolution–or perhaps mutiny–as physicians face millions of newly insured patients with which to keep up, suggests a piece on Dallas news outlet WFAA.com. In Texas, physicians are currently abandoning all involvement with Medicare at a rate of 100 to 200 per year, according to the Houston Chronicle.

But while concierge care may be good for doctors and the mostly middle-class patients who are willing to pay for it, some say it creates an unfair two-tiered health system of the haves and have nots, the Fiscal Times points out. “The majority of us think it’s an unethical and ultimately selfish way to practice medicine,” Dr. Micheal Stillman, an internist at Boston Medical Center, told the website.

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Act – Opted Out Physicians

“Under section 1802(b) of the Act and the implementing regulations
at 42 CFR 405.400 et seq., physicians and non-physician practitioners
can opt out of the Medicare program and enter into private contracts
with Medicare beneficiaries. By entering into these types of contracts,
these suppliers do not bill the Medicare program for services that they
furnish to Medicare beneficiaries. We require that physicians and
eligible professionals who have properly filed an appropriate affidavit
with a Medicare contractor in order to opt out of the Medicare program
be required to be identified in claims by their names and their NPIs if
they order or refer covered items or services for Medicare
beneficiaries. We are creating an exception to the requirement that
ordering and referring suppliers be required to have an approved
enrollment record in PECOS for those physicians and non-physician
practitioners who have validly opted out of the Medicare program.
Therefore, physicians and non-physician practitioners who have validly
opted out of Medicare are eligible to order and refer covered items and
services for Medicare beneficiaries. If they have properly completed
the appropriate affidavit in order to opt out of Medicare, they will
have records in PECOS that contain their NPIs and that indicate that
they have validly opted out of the Medicare program. In January 2009,
there were approximately 10,000 physicians and eligible professionals
who had opted out of the Medicare program. Compared to the more than
800,000 enrolled physicians and eligible professionals, there are
relatively few physicians and eligible professionals who have opted out
of Medicare.
Accordingly, the physicians or eligible professional that opted out
must meet the following:
A currently enrolled physician or eligible professional
who does not have an enrollment record in PECOS is required to
establish an enrollment record in PECOS so that he or she can order and
refer covered items or services for Medicare beneficiaries. A physician
or eligible professional who has validly opted out of the Medicare
program will have a valid opt-out record in PECOS and is not required
to submit an enrollment application.
A physician or eligible professional who is employed by
the Public Health Service, the Department of Defense, or the Department
of Veterans Affairs is required to have an approved enrollment record
in PECOS in order to order and refer covered items and services for
Medicare beneficiaries, even though he or she would not be
submitting claims to Medicare for services furnished to Medicare
beneficiaries. We require, therefore, that these physicians and
eligible professionals enroll in Medicare solely to order and refer
(and not to be paid for services furnished to Medicare beneficiaries).”

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The AAPP Regional Summit on Concierge Medicine in San Fransisco was a great success with 85 people in attendance. Approximately the same number were in attendance two weeks prior in NY. The content of each meeting is different from the ones before it,and member feedback clearly indicates that the conferences are delivering value. We have provided videos of James Currier, Dale Gauthreaux and Vy Le, all of whom are industry leaders and spoke during our recent conference in San Francisco. We hope to see you at the upcoming meeting in Kiawah Island, SC.

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AAPP is seeking nominations for board members. Please contact us with your nominations by May 1, 2010.

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AAPP announces the launch of its first local chapter – AAPP of Orange County. The chapter had its first meeting on January 29, and is now enrolling members. For information on how to join this chapter or to explore starting an AAPP chapter in your area, contact us.

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